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HELCO rate hike request blasted

By COLIN M. STEWART

Tribune-Herald staff writer

A review of testimony submitted last month to the state Public Utilities Commission reveals overwhelming opposition to proposals by Hawaii Electric Light Co. to increase its electricity rates next year.

One proposal calls for generating an additional $19.8 million in revenue via a 4.2 percent rate increase. HELCO says the extra revenue is needed to fund system upgrades and maintenance for its electric grid, as well as the inclusion of more renewable energy technologies. If the entire amount is approved by the PUC, it would add approximately $8.32 to the average, 500-kilowatt-hour monthly electric bill on the Big Island.

A second proposal would initiate a biodiesel supply contract with Aina Koa Pono-Ka‘u LLC and a related biofuel surcharge to customers to offset the costs brought about by the contract. An Aina Koa refinery in Ka‘u, which has yet to be built, would supply HELCO with approximately 16 million gallons of biodiesel each year for 20 years to fuel its Keahole power plant. The surcharge would add between 84 cents and $1 per month to a typical residential customer’s bill.

Hawaii Island residents first provided the PUC with feedback on the proposals in late October during a public hearing in Hilo. More than a hundred people showed up for the meeting, and several dozen provided testimony, with the majority speaking out against higher electric rates.

Following the meeting, residents were provided a public comment period through the end of November to submit testimony letters to the PUC. In those documents, which are available on the PUC website, HELCO customers spoke of their own personal struggles, as well as those of their neighbors, with paying the utility’s current rates.

“Many homeowners and business owners that I am in contact with, including our business and home, are already suffering from the cost of HELCO’s electricity prices and are on the edge of bankruptcy,” wrote Keaau resident Richard M. Fuller. “The other day when I was in HELCO’s office here in Hilo, there was a lady with a family of six struggling to pay her past due HELCO bill. She was three months behind and trying to catch up. …

“In this economy, with families struggling, is NOT the time to be doing this sort of thing. They have the population in a situation that they know that they can do what they want with pricing and the public is not convinced that the PUC is not under their control. Rising costs of electricity, phone, fuel and insurances are crushing American small businesses! I say NO!”

Pahoa bed-and-breakfast operator Petra Wiesenbauer agreed that electric rates are putting the pinch on small businesses.

“(The rate increase) will increase the cost of doing business for me and infringe on the viability of my operation,” she stated. “The nature of my business requires for electricity to be available to our guests and there are many times when I cannot control the use of it, because guests staying at my B&B may not be as conscientious in preserving energy as I am: fans, lights, radios or TVs are left on even though the visitors are not in their rooms.

“In order to cover additional operational cost, my only option would be to increase our B&B rates, however, with the current economy this will result in a decrease of bookings, as people traveling always look for bargains and are not willing to pay higher accommodation rates, if they can get a ‘beat-the-price’ online offer for some of the hotels as package deals with much better conditions.”

Bill Walter, president of W.H. Shipman Ltd., questioned the timing of the increase, pointing out that Hawaii Island rate payers pay four times the national average for electricity, and 25 percent more than Oahu customers.

“Hawaii Island residents include among the most economically challenged in the state of Hawaii,” he wrote. “While certainly not the only reason, the high cost of power works to keep our residents economically challenged. Why?”

Walter went on to compare electric rates to taxes, noting that the government has been reticent to raise taxes during the economic downturn. Government has worked to reduce the costs of government services while retaining service levels, through a variety of furloughs, employment freezes, layoffs and other measures, he added.

“It is uncomfortable, but notable, that we have heard of no such steps taken by our utilities in order to try to pass on to the community reduced costs that may be helpful in these difficult times. In fact, what we have heard is like this — requests for higher prices. Somehow, that difference is hard to take. … enough is already enough, and the line needs to be drawn now.”

Following public hearings in Hilo and Kona to obtain testimony, the state Division of Consumer Advocacy has been working the past two months to prepare testimony of its own, which Director Jeffrey T. Ono said Thursday could be submitted to the PUC within the next six weeks.

The division is charged with reviewing all applications filed with the PUC and to make recommendations to the commission on behalf of consumers.

Ono said that Big Isle opposition to the HELCO proposals had been some of the strongest that he has seen.

“Especially when you consider the number of rate payers on Oahu compared to the Big Island. If we got the kind of proportional opposition to a HECO rate case as we did with HELCO, it would have taken a couple days just to get through all the testimony,” he said. “People on the Big Island are very good about coming out and voicing their opinion, and we appreciate that.”

Ono added that the PUC had yet to set a schedule for proceedings on the rate case, but he estimated that a decision could be due some time in late spring or early summer.

“We try to complete an entire rate case in roughly 9 to 10 months from the date the application was filed,” he said. “(If the PUC votes to approve the application), you could see new rates in June.”

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